Recently, a CEO of Gulf Oil said that a barrel of oil could cost as low as $20, and gas prices could bottom out at $1 per gallon by early 2009.  Currently, gas is at $1.77 per gallon nationwide, according to AAA.

This information, coming from an insider in oil, is mind-boggling when you consider that just six months ago gas was at an all-time high of $4.11 per gallon and people were calling for roadside assistance because they avoided filling up their tanks and ran out of gas.

While many people in the media claim that low gas prices are the silver lining in what one could call an economy that is dismal, it’s in reality the canary in the coalmine, which foretells deflation and a severe recession.

However, in the real world, this may mean simply that the fuel bill won’t be a pressing matter over the next several months, while many people are concerned about housing and jobs.  For now, people are trying not to spend a lot of money.  In fact, most consumers are holding onto their current cars and protecting themselves with used car warranties.